Legislators praised the IRS’s decision to withdraw a proposed rule on Thursday that would have restricted the political activities of 501c4 non-profit organizations.
Senate Finance Committee Ranking Member Sen. Orrin Hatch (R-Utah) called the decision “long overdue” and a “step in the right direction.”
“The IRS is right to abandon its previously proposed rules governing 501c4 organizations that threatened free speech and the rights of all American citizens to participate in the democratic process,” Hatch said. “I am glad the IRS heard the concerns of hundreds of thousands of Americans, and I will continue to advocate for an IRS that is independent and nonpartisan.”
The IRS said its decision to withdraw the proposed rule came after it received criticism for being too broad and an attack on free speech in some of the 150,000 public comments it received on the proposal.
“Ultimately, the flawed IRS rule drew the ire of First Amendment advocates on both the left and right – these Americans, who broke records with critical comments about the proposed rule, deserve the most credit for blocking the implementation of the administration’s wrong-headed and ill-advised proposal,” House Oversight and Government Reform Committee Chairman Rep. Darrell Issa (R-Calif.) said.
In its announcement, the IRS said it would revisit the issue at a later date.
House Appropriations Subcommittee on Financial Services and General Government Chairman Rep. Ander Crenshaw (R-Fla.) said the proposed rule was “wrong from the start.”
“I hope (IRS Commissioner John Koskinen) reviews the findings of the various ongoing investigations before proposing a revised rule,” Crenshaw said. “Moving forward, as head of the subcommittee that funds the IRS, I will continue to keep a close eye on the process to ensure that the First Amendment rights of Americans are protected.”
Republican Study Committee Chairman Rep. Steve Scalise (R-La.) said the IRS should abandon its efforts to reform 501c4 tax law altogether.
The Treasury Department proposed the rule in November. It would have prevented 501c4 organizations from engaging in voter registration efforts, leading get-out-the vote activities and convening forums without jeopardizing their tax-exempt status.
Under current law, social welfare groups with 501c4 designation can engage in limited political activities if their primary activity is to promote social welfare.